Cloudflare Beneish M-Score Historical Data
The historical data trend for Cloudflare's Beneish M-Score can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Cloudflare Beneish M-Score Chart
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Cloudflare Annual Data
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Trend |
Dec16 |
Dec17 |
Dec18 |
Dec19 |
Dec20 |
Dec21 |
Dec22 |
Dec23 |
| Beneish M-Score |
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-1.79 |
-2.84 |
-2.80 |
-2.02 |
-2.58 |
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Cloudflare Quarterly Data
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Dec19 |
Mar20 |
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Mar24 |
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Sep24 |
| Beneish M-Score |
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-2.71 |
-2.58 |
-2.95 |
-2.75 |
-2.85 |
Competitive Comparison of Cloudflare's Beneish M-Score
For the Software - Infrastructure subindustry, Cloudflare's Beneish M-Score, along with its competitors' market caps and Beneish M-Score data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Cloudflare's Beneish M-Score Distribution in the Software Industry
For the Software industry and Technology sector, Cloudflare's Beneish M-Score distribution charts can be found below:
* The bar in red indicates where Cloudflare's Beneish M-Score falls into.
Cloudflare Beneish M-Score Calculation
The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Altman Z-Score) or business trend (Piotroski F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.
The M-Score Variables:
The M-score of Cloudflare for today is based on a combination of the following eight different indices:
| M | = | -4.84 | + | 0.92 * DSRI | + | 0.528 * GMI | + | 0.404 * AQI | + | 0.892 * SGI | + | 0.115 * DEPI |
| = | -4.84 | + | 0.92 * 0.9701 | + | 0.528 * 0.9788 | + | 0.404 * 1.0032 | + | 0.892 * 1.3004 | + | 0.115 * 1.2101 |
| - | 0.172 * SGAI | + | 4.679 * TATA | - | 0.327 * LVGI |
| - | 0.172 * 0.9837 | + | 4.679 * -0.139941 | - | 0.327 * 0.9308 |
| = | -2.85 |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
| This Year (Sep24) TTM: | Last Year (Sep23) TTM: |
Total Receivables was $266 Mil.
Revenue was 430.082 + 400.996 + 378.602 + 362.473 = $1,572 Mil.
Gross Profit was 334.115 + 311.985 + 293.564 + 279.19 = $1,219 Mil.
Total Current Assets was $2,164 Mil.
Total Assets was $3,063 Mil.
Property, Plant and Equipment(Net PPE) was $548 Mil.
Depreciation, Depletion and Amortization(DDA) was $128 Mil.
Selling, General, & Admin. Expense(SGA) was $984 Mil.
Total Current Liabilities was $642 Mil.
Long-Term Debt & Capital Lease Obligation was $1,408 Mil.
Net Income was -15.331 + -15.078 + -35.543 + -27.865 = $-94 Mil.
Non Operating Income was -3.066 + 0.269 + 1.124 + -2.103 = $-4 Mil.
Cash Flow from Operations was 104.727 + 74.815 + 73.579 + 85.441 = $339 Mil.
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Total Receivables was $211 Mil.
Revenue was 335.603 + 308.494 + 290.175 + 274.7 = $1,209 Mil.
Gross Profit was 257.534 + 233.273 + 219.743 + 206.912 = $917 Mil.
Total Current Assets was $1,858 Mil.
Total Assets was $2,590 Mil.
Property, Plant and Equipment(Net PPE) was $436 Mil.
Depreciation, Depletion and Amortization(DDA) was $129 Mil.
Selling, General, & Admin. Expense(SGA) was $769 Mil.
Total Current Liabilities was $478 Mil.
Long-Term Debt & Capital Lease Obligation was $1,384 Mil.
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1. DSRI = Days Sales in Receivables Index
Measured as the ratio of Revenue in Total Receivables in year t to year t-1.
A large increase in DSR could be indicative of revenue inflation.
| DSRI | = | (Receivables_t / Revenue_t) | / | (Receivables_t-1 / Revenue_t-1) |
| = | (266.385 / 1572.153) | / | (211.157 / 1208.972) |
| = | 0.16944 | / | 0.174658 |
| | = | 0.9701 |
2. GMI = Gross Margin Index
Measured as the ratio of gross margin in year t-1 to gross margin in year t.
Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.
| GMI | = | GrossMargin_t-1 | / | GrossMargin_t |
| = | (GrossProfit_t-1 / Revenue_t-1) | / | (GrossProfit_t / Revenue_t) |
| = | (917.462 / 1208.972) | / | (1218.854 / 1572.153) |
| = | 0.758878 | / | 0.775277 |
| | = | 0.9788 |
3. AQI = Asset Quality Index
AQI is the ratio of asset quality in year t to year t-1.
Asset quality is measured as the ratio of non-current assets other than Property, Plant and Equipment to Total Assets.
| AQI | = | (1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) | / | (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1) |
| = | (1 - (2163.878 + 548.065) / 3062.746) | / | (1 - (1858.003 + 436.222) / 2589.91) |
| = | 0.114539 | / | 0.114168 |
| | = | 1.0032 |
4. SGI = Sales Growth Index
Ratio of Revenue in year t to sales in year t-1.
Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.
| SGI | = | Sales_t | / | Sales_t-1 |
| = | Revenue_t | / | Revenue_t-1 |
| = | 1572.153 | / | 1208.972 |
| | = | 1.3004 |
5. DEPI = Depreciation Index
Measured as the ratio of the rate of Depreciation, Depletion and Amortization in year t-1 to the corresponding rate in year t.
DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.
| DEPI | = | (Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) | / | (Depreciation_t / (Depreciaton_t + PPE_t)) |
| = | (129.273 / (129.273 + 436.222)) | / | (127.656 / (127.656 + 548.065)) |
| = | 0.228601 | / | 0.188918 |
| | = | 1.2101 |
Note: If the Depreciation, Depletion and Amortization data is not available, we assume that the depreciation rate is constant and set the Depreciation Index to 1.
6. SGAI = Sales, General and Administrative expenses Index
The ratio of Selling, General, & Admin. Expense(SGA) to Sales in year t relative to year t-1.
SGA expenses index > 1 means that the company is becoming less efficient in generate sales.
| SGAI | = | (SGA_t / Sales_t) | / | (SGA_t-1 /Sales_t-1) |
| = | (984.163 / 1572.153) | / | (769.364 / 1208.972) |
| = | 0.625997 | / | 0.636379 |
| | = | 0.9837 |
7. LVGI = Leverage Index
The ratio of total debt to Total Assets in year t relative to yeat t-1.
An LVGI > 1 indicates an increase in leverage
| LVGI | = | ((LTD_t + CurrentLiabilities_t) / TotalAssets_t) | / | ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1) |
| = | ((1407.706 + 641.615) / 3062.746) | / | ((1384.045 + 477.775) / 2589.91) |
| = | 0.669112 | / | 0.718874 |
| | = | 0.9308 |
8. TATA = Total Accruals to Total Assets
Total accruals calculated as the change in working capital accounts other than cash less depreciation.
| TATA | = | (IncomefromContinuingOperations_t | - | CashFlowsfromOperations_t) | / | TotalAssets_t |
| = | (NetIncome_t - NonOperatingIncome_t | - | CashFlowsfromOperations_t) | / | TotalAssets_t |
| = | (-93.817 - -3.776 | - | 338.562) | / | 3062.746 |
| | = | -0.139941 |
An M-Score of equal or less than -1.78 suggests that the company is unlikely to be a manipulator. An M-Score of greater than -1.78 signals that the company is likely to be a manipulator.
Cloudflare has a M-score of -2.85 suggests that the company is unlikely to be a manipulator.
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